The effect of exchange rate changes on trade balances in the short and long run: Evidence from German trade with transitional Central European economies

R. Scott Hacker, Abdulnasser Hatemi-J

Research output: Contribution to journalArticlepeer-review

34 Citations (Scopus)

Abstract

Using generalized impulse response functions, this study tests for the trade J-curve for three transitional central European countries - the Czech Republic, Hungary, and Poland - in their bilateral trade with respect to Germany. Our findings suggest that for each country there are some characteristics associated with a J-curve effect: after a (real or nominal) depreciation the export-to-import ratio briefly drops to below its initial value within a few months and then rises to a long run equilibrium value higher than the initial one.

Original languageEnglish
Pages (from-to)777-799
Number of pages23
JournalEconomics of Transition
Volume12
Issue number4
DOIs
Publication statusPublished - Dec 22 2004
Externally publishedYes

Keywords

  • Central Europe
  • Generalized impulse response functions
  • Trade J-curve
  • Transitional economies
  • Vector error correction model

ASJC Scopus subject areas

  • Economics and Econometrics

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